Fashion giant Boohoo agrees deal to buy collapsed chains Oasis and Warehouse for £5.25 million

Fashion giant Boohoo has agreed a deal to buy the online businesses of collapsed chains Oasis and Warehouse for £5.25 million. 

Oasis Warehouse was placed in administration in April, with the loss of more than 1,800 jobs after a buyer could not be found for the high street stores.

Boohoo, which also bought Karen Millen and Coast’s online businesses last summer, said it would integrate the businesses into its online platform in the coming months. 

The Boohoo deal was announced as it cheered a ‘very strong’ hike in sales throughout the coronavirus lockdown, with UK sales surging 30 per cent in the three months to May 31.

The brand said today it would top market expectations for profits and sales again this year after first-quarter results showed revenue up 45 per cent.  

‘Oasis and Warehouse are two well-established brands in the UK targeting fashion-forward shoppers and are a complementary addition to our portfolio of brands,’ Boohoo said.

The group agreed the deal with financial investor Hilco Capital, which bought the Oasis and Warehouse brands and stock from administrators in April. 

It comes as Boohoo is planning to capitalise on the shake-up in the retail sector, having raised £197.7 million in an investor cash call last month to ‘take advantage of numerous M&A (mergers and acquisitions) opportunities that are likely to emerge in the global fashion industry over the coming months’.

Shares in Boohoo jumped 10 per cent higher after its trading update and news of the deal, as it said snapping up a pair of struggling brands it said would help it build on its momentum at a time when many brick-and-mortar retailers are collapsing.

Boohoo, which owns the Nasty Gal and prettylittlething brands, has become a hit with a generation of younger consumers who shop on their mobile phones and share fashion tips on social media.

‘Whilst there is a period of uncertainty within the markets in which we operate, the Group is well-positioned to continue making progress towards leading the fashion e-commerce market globally,’ Chief Executive Officer John Lyttle said.

Revenue surged to £367.8 million from £254.3 million a year earlier, well ahead of the consensus of a 15% growth, according to Jefferies analysts.

The analysts said they view the acquisition of Oasis and Warehouse ‘as a low risk and likely high returning opportunity, one that provides further evidence of the long-term potential in boohoo’s multi-brand platform’.

It follows billionaire Pretty Little Thing founder Umar Kamani selling his stake in the company to his father’s firm Boohoo in a deal worth nearly £324 million.

Mahmud Kamani, owner of the online fashion retailer, snapped up the remaining 34 per cent of shares in his son’s business in May for £269.8 million.  

This sum could rise by another £54 million if the deal can help Boohoo shares hit 491p a share for a six-month period at some point over the next four years. 

It came days after a 53-page report was published by Shadowfall, which bet on share prices falling, alleging that Boohoo had provided a ‘misleading impression’ of its free cash flow position.

Conflict of interest criticisms were refuted by Boohoo earlier this week.

Love Island stars such as Molly-Mae Hague and girl band Little Mix are among the celebrities to have publicly endorsed the Pretty Little Thing brand in recent years, with other celebrities including Kylie Jenner, Khloe Kardashian, Nicole Scherzinger and Paris Hilton also seen wearing the label.

It has helped 32-year-old Mr Kamani, regularly seen enjoying a luxurious lifestyle on Instagram, develop a personal wealth of more than £1 billion.

His wealth has allowed him to buy a fleet of cars, including two Rolls-Royce Phantoms, a £300,000 Lamborghini Aventador, a £92,000 customised G-Class Mercedes and a high-end Range Rover.

He leads a playboy lifestyle, regularly travelling by private jet to socialise with the likes of P Diddy, Jennifer Lopez and Denzel Washington.

Other pictures on his Instagram account show him with US reality star Kylie Jenner, dining at the plush Nobu restaurant in Malibu and posing at the wheel of a yacht on Italy’s Amalfi Coast.

He did, however, pledge to donate an entire month’s salary to struggling small businesses affected by the pandemic back in March.

Despite the sale, in which Mr Kamani and his fellow shareholders will get £161.9 million in cash, and the rest in Boohoo shares, the businessman will continue to work as Pretty Little Thing’s CEO.

In an earlier statement, Boohoo said the deal for the women’s fashion brand, aimed at the 14-to-24-year-old market was an ‘important further step towards achieving its vision to lead the fashion e-commerce market globally.’

The purchase, which had been played down by the company following initial reports, is the latest in a string of acquisitions made by the fashion business, including high street names Karen Millen and Coast.